LightSquared had planned to offer wholesale service to partners to retailers, consumer electronics companies and wireless operators could use its network to offer their own services.

The Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA), a federal agency that oversees government and military spectrum use, recently ruled that LightSquared´s network would interfere with GPS and other devices, reports Scott Moritz and Todd Shields for Bloomberg.

The network that LightSquared was attempting to build would have competed with AT&T and Verizon Wireless, but it was blocked by the FCC this month over concerns about potential disruptions to global-positioning systems.

“There are no mitigation strategies that both solve the interference issues and provide LightSquared with an adequate commercial network deployment,” Lawrence Strickling, administrator of the NTIA, said in a letter to the FCC.

Ahuja will be replaced temporarily by co-chief operating officers Doug Smith and Marc Montagner, the company said in a statement. Ahuja will remain chairman and Philip Falcone, the billionaire backing the venture, will join the company´s board.

LightSquared rival Clearwire is seeing an opportunity with these developments by taking advantage of its valuable holdings in spectrum, it is now working to build its own LTE network, with hopes of having 5,000 sites by the middle of next year.